It's a big decision to stay home with your family, rather than continue in a traditional job outside home. There are many choices you must make if you decide to work from home, and many pitfalls to avoid.
The first things to look at are your skills and interests. Working from home is in some ways more difficult than working outside home (but more fun, since you don't have to leave your children), so do what you love if at all possible.
Next, decide if you are interested in a job or a business. You will need to consider hours you want to work as well. Many jobs need you during traditional business hours; others allow you to work your own. Likewise, many home businesses need regular hours, others, such as party plans, require a great deal of evening and weekend work.
Consider how much money you can invest. If you want a work at home job, you should not have to pay to get job itself, but some do have other investments required. For example, in addition to running my website, I do medical transcription. This required that I get appropriate reference books, and I rent a Dictaphone from my employer. Do not pay to get job under any circumstance. Just remember that you wouldn't pay for a traditional outside home job. Businesses, on other hand, often require some sort of investment, depending on kind of business. Some may even have monthly costs, such as for websites or supplies. Know what you can afford.
Think about how much interaction with other people you want. If you're not interested in telling everyone you meet about what you do, a business may not be for you, particularly if you have to sell things in person.
Take a look around your home and figure out what you can use for office space. You will need a place you can keep all your business supplies and work in relative peace. Remember, if you take a job taking calls, most employers require that you not have children yelling in background. Even if you can have your kids around, you will get more done in a peaceful environment.